4:10pm: Rate-cut bets waver
Stocks wrapped up the session pretty much where they started on Wednesday, as investors digested a stronger-than-expected jobs report that muddied the outlook for Federal Reserve rate cuts.
The Dow Jones Industrial Average slipped 67 points, or 0.1%, to close at 50,121. The S&P 500 was essentially flat at 6,941, while the Nasdaq Composite edged down 36 points, or 0.2%, to 23,066. The small-cap Russell 2000 underperformed, falling 11 points, or 0.4%, to 2,669.
The real story of the day was the labor market. A surprisingly strong jobs report threw a bit of cold water on the recent narrative that the economy is cooling enough to justify near-term rate cuts. Just weeks ago, softer December retail sales had boosted hopes that the Fed might soon pivot toward easing. Now, traders are recalibrating.
Markets are currently pricing in a growing chance that the Federal Reserve will keep rates steady in the coming months, with more than 40% of investors expecting policymakers to stand pat through June.
Attention is also turning to earnings season for clues about the health of the American consumer and corporate spending trends. McDonald’s is set to report after the bell, offering a read on global consumer demand, while Kraft Heinz said Tuesday it would pause its previously announced spin-off plans.
In tech, Cisco is due to report after the close as well, with investors watching closely as the networking giant rolls out a new AI-focused chip aimed at competing for a share of Big Tech spending.
3:45pm: Proactive news headlines
- OKYO Pharma transitioned its At-The-Market equity offering facility to Leerink Partners, replacing B. Riley Securities as the exclusive sales agent.
- BioVie is advancing its oral small-molecule drug bezisterim (NE3107) to target neurodegeneration, with Parkinson’s disease emerging as the lead focus.
- C3 Metals closed a C$28 million bought deal private placement to fund development of its copper and gold projects in Peru and Jamaica.
- Standard Uranium began drilling at its Corvo uranium project in Saskatchewan under a three-year earn-in agreement with Aventis Energy.
- Virtuix expanded sales of its full-body VR Omni One platform into major European markets, including Germany, the UK, and France.
- Arizona Gold & Silver appointed veteran geologist Darin Wagner as an advisor to the company’s CEO.
2:50pm: Market movers
- Unity beat fourth-quarter earnings expectations but its shares plunged over 28% after issuing first-quarter revenue guidance below Wall Street forecasts and signaling a cautious outlook.
- Moderna shares fell nearly 6% after the FDA issued a Refusal-to-File letter for its seasonal flu vaccine application, citing concerns over the comparator used in its Phase 3 trial.
- Shopify stock dropped almost 13% despite reporting stronger-than-expected fourth-quarter revenue and earnings, as investors reacted negatively following a strong prior run in the shares.
- Cloudflare shares jumped about 11% after the company delivered fourth-quarter revenue that topped estimates, driven by 34% year-over-year growth.
- Lyft shares fell roughly 13% after reporting in-line fourth-quarter revenue and better-than-expected earnings, but issuing a softer profitability outlook amid slowing ride growth and competition.
- Mattel shares tumbled 27% after the toymaker reported quarterly results that missed expectations and warned that strategic investments would weigh on near-term earnings.
2:00pm: Bitcoin selloff resumes
Bitcoin is still out of favor, trading around $67,600 on Wednesday afternoon.
There still seems no appetite to go dip-buying in the asset class, which hit fresh multi-month lows last week," said Chris Beauchamp of IG.
"In a world filled with AI and where gold continues to shine, bitcoin’s appeal is firmly on the wane at present, and if this selloff is like the others, we could be in for a long period of declines before it finally hits a sustainable low.”
1:00pm: 'Feast for hawks'
Bank of America analysts called today's jobs report "a feast for the hawks," or strongly supportive of the Federal Reserve’s current policy stance.
Payrolls surged well above expectations, wages and hours rose, and downward revisions were minimal, with strength broad-based across industries.
The unemployment rate fell to 4.3% for “good reasons,” including a 528,000 rise in household employment and higher prime-age participation. The broader U-6 underemployment rate also dropped to 8.0%, and long-term unemployment fell.
Analysts said the report reinforces the view that Fed Chair Jerome Powell is unlikely to cut rates this year, with markets now pricing minimal near-term easing. They noted that under a potential Christopher Warsh-led Fed, the path to cuts may narrow if the unemployment rate remains low.
11:30am: Labor market stabilizes (slowly)
Analysts described January’s US jobs report as broadly encouraging but noted ongoing challenges in the labor market. Wells Fargo economists said, “The labor market is far from perfect, with hiring still concentrated in a handful of industries and certain demographics enduring elevated unemployment. That said, it appears closer to stabilization than rapid deterioration, which will embolden the hawks on the Federal Reserve to maintain the current policy stance.”
Gina Bolvin of Bolvin Wealth Management highlighted slower growth last year, noting the addition of 130,000 jobs shows stabilization while downward revisions to 2025 reflect meaningful deceleration. LPL Financial’s Jeffrey Roach pointed to rising average workweeks, suggesting some sectors are boosting hours rather than headcount. XTB’s Kathleen Brooks noted the unusual revisions for 2025 but said the three-month payroll average is trending upward, signaling momentum into 2026.
The report initially lifted U.S. Treasury yields and has shifted expectations for Federal Reserve rate cuts, with analysts now projecting fewer cuts this year and the first potential reduction in July rather than June.
10:35am: Stronger-than-expected jobs report
The US labor market showed signs of strength in January, with job creation doubling expectations, even as final revisions for 2025 cut 862,000 positions, averaging 72,000 fewer jobs per month. Unemployment fell to 4.3%, while average hourly earnings rose 3.7% year-over-year.
“Until we see significant weakness in the labor market, the economy or corporate profits, we believe this is still a market where dips can be bought,"" Chris Zaccarelli, Chief Investment Officer at Northlight Asset Management, said.
Zaccarelli added that the report could ease recent stock market jitters tied to concerns over a potential slowdown and may temper expectations for near-term interest rate cuts.
10am: Dow hits new high but early gains cut
US stocks have opened higher but the gains of the main indexes have been trimmed already.
The S&P 500 and Nasdaq opened up over 0.7% higher but are now up just over 0.1%.
The Dow Jones initially climbed over 0.5% to hit a new high above 50,450 in initial trades, but is now up around 0.2%.
Leading the way, Nvidia has climbed 2.2%, with Caterpillar topping the Dow gains, up 4.4%. Salesforce is a weight, falling 3.3%.
Outside the blue-chips, Mattel tumbled 26% after the toymaker reported quarterly results that fell short of expectations, with the profit outlook affected by plans for strategic investments.
LYFT dropped 14% as the ride-hailing company met fourth-quarter forecasts but offered a softer profitability outlook, with analysts pointing to slowing ride growth and competitive pressures.
8.45am: Payrolls report gives stocks boost
US stock futures have picked up after the delayed January jobs report came in stronger than expected.
For January, there were 130k new jobs added, well ahead of the consensus forecast of 55k.
The US unemployment rate fell to 4.3%, from 4.4%, where it had been expected to stay.
Average hourly earnings were up 0.4% to $37.17. Over a year the rise was 3.71%.
New payrolls for 2025 the average monthly change was revised down to +15k from +49k.
Nasdaq futures are now up 0.5%, S&P 0.45% and Dow Jones almost 0.4%.
7.50am: US stocks expected to rise on Wednesday
US futures were modestly positive in early morning trading on Wednesday, with the market waiting for the delayed January non-farm payrolls report.
Unless the jobs data upsets the apple cart, the Dow Jones is set to make further steps into record territory, with futures up 0.1%.
S&P 500 futures were also up 0.1%, while those for the Nasdaq 100 were up 0.2%.
This followed a mixed close a day earlier, with the Dow notching its third consecutive record close, finishing up 52 points or 0.1% at at 50,188.
The S&P 500 fell 0.3% to 6,942, the Nasdaq ended down 0.6% at 23,102, and the Russell 2000 lost 0.4% to close at 2,679.
This came on the back of slower US retail sales data, which added caution to an otherwise strong earnings season.
Ahead of the jobs report, which is due at 8.30am ET, the dollar was soft, with the DXY index down 0.1% at 96.72.
Crude was stronger, up 2.1% at $65.32 a barrel of West Texas Intermediate. Gold, silver and copper were all higher too.
The delayed NFP report is expected to show that 66,000 jobs were created last month, up from 50,000 in December.
Traders have to "weigh up whether a deterioration in the jobs market would be enough to force the hand of Powell before he leaves in May", said market analyst Joshua Mahony at Scope Markets.
"Whilst that remains the less likely outcome, markets are currently pricing a 40% chance that we see the Fed ease in either March or April."
He noted that some connected to the White House, namely representatives Peter Navarro and Kevin Hassett, have tried to "dial down expectations" for today’s report.
"Notably, the weakness of the jobs market does fly in the face of the impressive 4.4% GDP rate seen for Q3, with a distinct divergence between economic growth and employment trends."
For markets, Mahony said the declines seen in the US dollar highlight "both a shifting narrative around a potential cut under Powell and the prospect of a dovish Warsh".
A weak NFP followed by weak inflation on Friday "would undoubtedly push the Fed closer to a cut".